There is currently a very strong interest globally in investing in diamonds, according to Yair Shimansky, leading designer and manufacturer of diamond and tanzanite jewellery.
He told Fin24 that investments in diamonds, due in part to a growing number of consumers appreciated on average 15% per year over the last 50 years.
As the demand for diamonds keeps on growing in China and India, the available supply will be less, as not many new mines are coming on board. That would mean that diamond prices would keep on going up.
“A diamond is the most condensed store of wealth,” said Shimansky. “From an investment point of view, a diamond is more rare than gold and you can easily take it anywhere in the world.”
For South African investors he regards diamonds as having a good advantage against the dollar.
“And more than that, if you invest in property you cannot put your property in your pocket,” he pointed out. “You can buy a diamond and set it in jewellery even while it appreciates in value.”
Not all diamonds are suitable for investments, though. It depends on an individual’s investment strategy as there would be different options for short, long and medium-term investments.
“Sometimes a rough diamond could be more expensive than a cut diamond and fancy colours like yellow ones could also appreciate more, for instance,” said Shimansky.
“It is very important to understand that an investment diamond is not one where you walk into a store and just buy a diamond. Investment in diamonds is a very specialised area,” he said.
“Diamonds are becoming increasingly popular at international auctions. They are fetching higher and higher record prices. Recently one was sold for US$60 million.”
Shimansky said a lot of financial institutions are also currently investing in a diamond portfolio for their international clients. “Investors understand the rarity of diamonds and therefore there is a growing demand,” Shimansky concluded.
Source: Fin24. For more information, click here.
Picture: Leading jewellery designer Yair Shimansky.